Insights
better business decisions
Posted 3 years ago | 2 minute read
Wholesale energy prices tripled from last year, market operator says
The Australian Energy Market Operator (AEMO) has described the June quarter as an unparalleled period for the nation’s energy markets.
In its latest Quarterly Energy Dynamics report AEMO noted that wholesale electricity spot prices averaged $264/MWh in the NEM for Q2 2022 – up $177/MWh on the previous quarter and more than three times on the same period in 2021 )$85/MWh). The cause was reported to be a combination of outages at coal-fired power plants and soaring global fossil fuel costs which created “unprecedented” market disruptions including the application of administered price caps and the first suspension of trading in Australia’s main grid since its creation in 1998.
AEMO said coal-fired generation outages reached highs of about 3.6GW in late April and peaked in June at 4.6GW. Those outages combined with fuel supply constraints saw black coal generation’s average quarterly output down by 947MW to its lowest Q2 output on record. Output from brown coal plants also dropped and gas-fired generation overtook coal as the primary fuel towards the end of the quarter, rising 27% to 472MW from Q2 2021 to its highest Q2 level since 2017. Generation from grid-scale solar and wind increased 21% from a year earlier, driven by new capacity additions and commissioning. Overall renewable supply share for the quarter was 31.8%, up 3.7% on the same time last year.
NEM average wholesale electricity spot price – quarterly, months of Q2 2022
Source: AEMO
GridBeyond Sales Director Australia Lisa Balk said:
“Australia is in the throes of an energy crisis, with prices for the last quarter triple those seen this time last year. The three months to June had been one of the most complex and challenging periods in the market’s history and underscored the need to accelerate the transition to renewable energy generation, storage, transmission, and system services.
“At GridBeyond we use machine learning and AI-powered technologies, driven by data science, that enable I&C businesses to participate in a wide range of grid programmes that not only bring new revenues streams and cost savings that can help businesses to mitigate against price rises, but also support the grid by ensuring power supplies remain secure for all consumers in an increasingly renewables drive power sector.”